With just a few days to go before the end of 2022, investors are already thinking about what may be the best investment for next year, especially considering the inflationary context and the regulatory framework affecting rentals in Spain. For this reason, Suomma invest, a turnkey investment service for the purchase of properties for short and medium term rentals, has analysed which are the 10 best areas in Spain to invest in holiday rentals next year, taking into account the trend that they are showing. So, if you're thinking of buying a property in Spain to rent out, these are the best Spanish cities for investment.
The best cities to invest in holiday rentals in Spain
| Town / City | Area | Score |
| Málaga | Costa del Sol | A+ |
| Torremolinos | Costa del Sol | A- |
| Sitges | Costa Brava | A- |
| Marbella | Costa del Sol | B |
| Santa Pola | Costa Blanca | B |
| Benidorm | Costa Blanca | B |
| Fuengirola | Costa del Sol | B+ |
| Mijas | Costa del Sol | B+ |
| Benalmádena | Costa del Sol | B+ |
| Almería | Almería | B+ |
How is this investment trend result produced by location?
To arrive at this result of the 10 locations in Spain where the investment trend in holiday rentals is favourable, Suomma invest has compared the performance of this market with Airbnb's top 2,000 global holiday rental markets. Thus, Suomma's analysis, for A and B ratings, has taken into account 4 key concepts:
Rental demand
This answers the question: how often are rentals booked throughout the year in each location? Therefore, the growth rate in demand is analysed, combined with the annual occupancy. This means that the highest score, e.g. A+, occurs when travel demand is very high.
Revenue growth
In this section, it has been analysed whether properties earned more this month than in the same month last year. For a high score, there has to have been an increase in revenue per property.
Seasonality
With seasonality, we look at how much the demand for travel differs between high season and low season. In order to get a high score, there must be low seasonality, i.e. the demand remains more homogeneous between the two seasons, without large peaks.
Regulation
With regard to regulation, the analysis carried out by Suomma identifies the signs of legal and administrative regulation that may affect holiday rental properties. In order to achieve a high score, there must be low regulation in the area
The growth of holiday rentals in Spain
"The demand for AirBnB has grown by 45% in the last 12 months and by 55% in the best locations. And, on the other hand, seasonal rental demand is growing faster than supply in some locations, allowing for returns on investment that are double the investment of residential rentals," says Suomma CEO Borja Badiola.
"The owners of residential rentals will see their profitability diminished in 2023, as the Government has recently approved the extension for the whole of 2023 of the 2% cap on the updating of rental rents".
"Holiday and mid-term rentals are not affected by this cap, so they will be a safe haven for investors who do not want to lose profitability in rentals," concludes the Suomma executive.